Accounting Chapter 1 Pearson MyLab
CMAs
Certified Management Accountants
CPAs
Certified Public Accountants
F/S
Financial Statement
Financials
Financial Statements
Financial Statements
Financial reports that summarize the financial condition and operations of a business. Includes the Income Statement, Statement of Owner's Equity, Balance Sheet, and the Statement of Cash Flows. Specifically in that order.
N/P
Notes Payable
Return on Assets
How well a company uses its assets. ROA = Net Income/Average Total Assets Average Total Assets= Beginning Total Assets/Ending Total Assets/all divided by 2
Monetary unit Assumption:
Requires that items on any financial statement must be recorded with a monetary unit.
ROA
Return on Assets
I/S
Income Statement
FASB
The Financial Accounting Standards Board - Oversees creation and enforcement of accounting standards in the USA
Income Statement
A financial statement showing the revenue and expenses for a fiscal period. Reveals net income, or net loss.
Statement of Cash Flows
A financial statement that provides financial information about the cash receipts and cash payments of a business for a specific period of time.
Balance Sheet
A financial statement that reports assets, liabilities, and owner's equity on a specific date. Requires the Owner's Equity computed in the earlier statement
Audit
A review of a companies financial statements and records
Statement of Owner's Equity
A summary of the changes in owner's equity that have occurred during a specific period of time, such as a month or a year. Requires the net income or loss recorded in the Income Statement. Ends with 'Owner, Capital, Month/Day, Year'
A = L + E (OE)
A: Assets L: Liability E: Equity OE: Owner's Equity
A/P
Accounts Payable
Liability Accounts
Accounts Payable, Notes Payable, Accrued Liability (such as Utilities Payable, Taxes Payable, Rent Payable, and Salaries Payable) and Unearned Revenue
Economic entity Assumption:
An assumption that every economic entity can be separately identified and accounted for.
Going Concern Assumption
Assumes a business entity will remain in operation long enough to use its resources.
Cost principle:
acquired assets and services should be recorded at then actual cost. (The amount paid/ on the receipt)
SOCF
Statement of Cash Flows
SOOE
Statement of Owners Equity
Accounting Equation
Assets = Liabilities + Owner's Equity
B/S
Balance Sheet
GAAP
Generally Accepted Accounting Principles
IASB
International Accounting Standards Board
IFRS
International Financial Reporting Standards
OCOB
Ordinary Course of Business
Equity Accounts
Owner Capital, Owner Withdrawals, Revenues, Expenses (such as Rent Expense, Salaries Expense, and Utilities Expense)
SEC
Securities and Exchange Commission - Oversees USA financial markets
Account
a record summarizing all the information pertaining to a single item in the accounting equation
Cash flows from operating activities
cash inflows and outflows directly related to earnings from normal operations (doesn't include anything on account, or payable)
Cash flows from financing activities
cash inflows and outflows related to external sources of financing (owners and creditors) for the enterprise
Cash flows from investing activities
cash inflows and outflows related to the sale or purchase of investments and long-lived assets
Asset Accounts
cash, accounts receivable, notes receivable, prepaid accounts, supplies, equipment, buildings, land, and fixtures.